Ghanaian’s MPharma has announced that it is buying Kenya’s second largest pharmacy chain, Haltons Pharmacy.
Through the deal, MPharma, a six-year-old company which manages prescription drug inventory for pharmacies and their suppliers, will enter the East Africa regional market for the first time.
The unprecedented deal between the two companies will see MPharma manage 20 Halton stores in Nairobi and Mombasa.
The startup is reported to be taking control of Haltons from Fanisi Capital, a Mauritius based private equity firm, however, the senior management at Haltons will still retain a stake in the business.
Speaking on the deal, MPharma’s CEO Greg Rockson stated that the unexpected deal came about as part of conversations to market its Vendor Management Inventory (VMI) platform to the chain, but realized there was an opportunity to prove just how much the efficiencies of managing the both front end and back end could help African pharmacies.
The VMI system is already being used in over 250 pharmacies in Ghana, Nigeria, Zambia and Zimbabwe and now in Kenya.
Confirming the deal, Haltons’ managing director, Mary Ngige stated that their company was attracted to the deal in order to improve efficiency within the pharmacy’s supply chain.
She affirmed that MPharma’s inventory management software will be very significant in their firm as well as it is aligned with Haltons’ mission to improve drug accessibility and affordability.
“This is a volume business and their technology will help us fine-tune our model and improve competitively,” Ms Ngige mentioned.
It is further believed that MPharma paid Haltons under 5 million dollars for the chain since Haltons is recorded to have made revenue of around 1.5 million in 2018.
According to Ngige the new ownership and better systems could see it start to expand in the near future.
Haltons is the second largest pharmacy chain in Kenya after Goodlife Pharmacy which has 47 stores and is owned by South African investor Leapfrog Investments.
It is alleged that under Ngige’s management, the pharmacy which used to own 50 stores ones, slimmed down, closing unprofitable stores.